Tanzania: Small-Holder Farmers' Access to Credit Remains Difficult

Tanzania has made equipping farmers with implements a primary concern in a drive termed "Kilimo Kwanza" meaning Agriculture First (file photo).

SMALL-HOLDER farmers' access to finance has remained one of the major obstacles to an agricultural revolution and the speedy eradication of poverty in society.

Uncertainties arising from the agricultural process, such as dependency on rainfall and poor farming systems, have been making lending facilities hesitate to disburse loans to farmers for large-scale investments to boost productivity. A land title is one of the essential prerequisites for loan qualification set by the lending institutions, but which has been denied to most small-holder farmers.

Despite the efforts to formalise land ownership, only a few individuals have benefited because the process has been slow, thus becoming a major factor limiting farmers' capacity to access to finance, which is a necessary component for investment in agriculture. "Unlike business people who could secure finance from lending institutions by just presenting only a business plan, for accessing loans farmers should hold a title deed," said the Economic and Social Research Foundation (ESRF) Executive Director Dr Bohela Lunogelo last week.

The tedious and slow process involved in issuing title deeds or certificates of customary rights of occupancy (CCROs) has been a source of increased disputes, which portrays land tenure insecurity. Statistics show that so far only 57,000 villages parcels out of about four million nationally, equivalent to 1.4 per cent have been delivered since the process of issuing CCROs started in 2004 and only six districts out of 131 (about 4.6 per cent) have participated.

Similarly, studies have revealed that nearly 90 per cent of real properties and 95 per cent of all businesses in Tanzania are extralegal which make owners miss fundamental economic mechanisms indispensable for the creation of wealth, elimination of poverty and the foundation of an inclusive modern economy. Presenting the proposal, Dr Georgina Ole Saibul from ESRF said the project to be undertaken in three districts of Wanging'ombe, Kilombero and Mbozi was significant because 80 per cent of the population derives their livelihood from agriculture where each smallholder farmer tills an average of 0.2 ha of land.

The Kilombero District with high potential for agriculture and livestock development has been selected because was one of the areas where the pilot projects on land titling implemented under support of the European Union. Literature reveals that though not documented, the approach of land titling using EU support was essentially a success and best practices worth sharing with other stakeholders.

She said economic indicators show that despite experiencing positive development growth in recent years, land based sectors like agriculture, livestock, forestry, hunting and fishing have been trailing at three to four per cent behind, while their share to the Gross Domestic Product (GDP) is also shrinking. She said the project will not come up with something new but find out the gap that has been left out during the implementations of land formalization by the government like the Property and Business Formalisation Programme (PBFP).

It will thus contribute significantly towards enhancing the understanding and awareness of the whole process involved in land titling particularly in the rural areas. Specifically, the project will explore districts where the process of land titling has been successful and wherever it failed. "The ultimate goal of the project is to improve agricultural productivity for small-holder farmers, especially women in the bread basket region through enhanced security of tenure," she observed.

The Senior Programme Officer, Public Engagement from Haki Ardhi Ms Beatha Fabian said although 70 per cent of land belongs to the village, lack of awareness on laws pertaining to ownership has remained to be the major setback. The scenario has been a loophole for few greedy individuals to grab village land and sell to investors, a move that is fuelling unending conflicts which stumbles efforts to engage in farming activities to liberate themselves from abject poverty. "There is need to enhance land titling for the villagers to use it profitably for accessing development loans from the various lending facilities in the country," she said.

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